Hard choices for BA

Wednesday 13 February 2002 00:00 BST

Evening Standard editorial comment

One in four employees of British Airways have lost their jobs since 11 September, and in the company's glittering head office near Heathrow the figure rises to one in three. At Gatwick, the second most important hub in the BA system, there are today just four British Airways flights for every 10 which took off in the summer of 1999.

These are just the most visible signs of retrenchment detailed in a long-awaited survival plan outlined today by the BA board. It will see the airline shrink, but it is people rather than routes which bare the brunt of the cuts. BA is trying to make do with less while maintaining the bulk of its services; trying to steal the clothes of the low cost short haul carriers while holding on to its position as a global airline. Desperate times call for desperate measures and the issue is whether these moves are desperate enough.

The British airline is heading for its biggest loss in the 15 years since it was privatised, it has a mountainous £6 billion of debt and unlike its American and continental rivals it does not have a friendly government willing to tip it a few hundred million to tide it over its current difficulties.

British Airways stands or falls by its own efforts. It could work, but only if the world economy picks up soon. BA is targeting first and business class passengers flying long haul. Its ideal customer is the corporate executive and the City investment banker. If the world economy continues to improve these people will fly again and BA will prosper. But it remains a big if.

Tussles in Brussels

Only outright anti-Europeans can draw any comfort from the latest example of high-handedness from the European Commission. It concerns the freedom of individual countries to manage their own economies within sensible limits. The Commission has criticised both Germany and Britain for the way they run their public finances. Mr Gordon Brown had to fight his corner at a meeting yesterday of European Finance Ministers to fend off demands that the Treasury reduce public spending by a massive £10 billion a year in order to keep within the terms of the European Stability Pact.

If any major European economy falters, the ripples spread to affect us all. We therefore have an interest in seeing stable, non-inflationary growth across the continent. There is a strong case for sensible rules that stop any single country stepping too far out of line. The real problem with the latest strictures from Brussels is that the current rules are not sensible. It was madness to seek to impose deflationary measures on Germany, where unemployment now stands at four million.

It is equally absurd to try and rein in British public spending when our public finances are strong and our national debt, relative to gross domestic product, is lower than for many decades. In another neck of the woods, the European Central Bank operates less effectively than the Bank of England in the way it sets interest rates. Its guidelines are less clear and, in practice, it has proved less nimble at responding to changing circumstances - for example, last year's global downturn and the economic dangers posed by the fallout in New York and Washington from the terrorist attacks in September.

The overall lesson is that the economic governance of Europe needs to be greatly improved. Instead of haranguing the Chancellor, the Commission should be looking to him, and other successful finance ministers, for sensible advice on how to overhaul the Stability Pact. Radical improvements will be vital before it can make any economic sense for Britain to join Europe's single currency.

No crowing

The likely election of Bob Crow as general secretary of the RMT will test the notion of democratic accountability in the largest of the rail unions. Mr Crow is supported by the far-Left Socialist Alliance, and believes, like them, that strike action raises the consciousness of the rank-and-file. He has been associated with some 30 strikes in his 10 years as an official, and has advocated ending the RMT's link with Labour.

His election, which appears inevitable, leaves open the posts of numbers 2 and 3 in the union and makes it more likely that these too will be filled by hard-Left candidates. However, the decision by 2000 staff of South West Trains to report for work on Monday, thus forcing the RMT to call off its planned four-day strike action, sends a clear message to Mr Crow: yes, you can fight for us, but not at the cost of our wage packets.

The RMT's greedy and belligerent attempt to force SWT's management to give its guards and station staff parity with train drivers inevitably forced SWT to fight its corner, and resulted in staff losing up to £400 each because of stoppages, making them worse off than they would have been with sensible negotiators. Mr Crow's election may look like a victory for socialist agitation; the reality could be very different.

Control freaks

There is no better way to call the tune than to pay the piper. That is exactly what this Government has in mind for the chairmen of select committees, the cross-party groups of MPs with specific powers to scrutinise the executive. Their constitutional role, especially vital when the government has a vast majority, was spectacularly defended last summer when backbenchers voted down government whips' attempts to sack two outspoken chairmen, Gwyneth Dunwoody and Donald Anderson.

New proposals from the Commons Modernisation Committee now include a suggestion that committee chairmen be paid over and above their MP's salary. The claim is that scrutiny would become a more attractive career. This is nonsense. An extra £30,000 or so would simply place the chairmen on the government payroll, giving them a personal incentive not to cause trouble. That would suit Downing Street's control fetishists, but it would further undermine the already weakened powers of Parliament.